GOVERNOR PUSHING HARD TO CUT INCOME TAXES THIS YEAR

Gov. Norm Bangerter, who faces re-election this year, would like to give you an income tax cut this summer. His administration is working hard to find a way to do it.

Reed Searle, Bangerter's chief of staff, said a major goal of an income tax task force now being formed will be to find a way to reduce the tax rates.Several things must happen for that to be possible, he added.

First, the current income tax, or other taxes, must be generating more money than intended thus allowing the same level of state spending but enough extra money for the rate reductions. "Now, that looks like a real possibility. All indications are the income tax is bringing in more than anticipated," Searle said.

Second, Republicans in the House and Senate must agree with Bangerter and his task force on the method of reworking the taxes. "We won't go to a special (legislative) session without agreement on the accuracy of the data what the taxes are currently bringing in and general agreement on what to do."

In other words, Bangerter doesn't want to take an income tax reform package to a special session only to see it fail in a fight over a flat-rate tax, which the House likes and the Senate doesn't, or some other dispute.

Republicans hold majorities in both houses. While it would be nice to have bipartisan support, it isn't required, Searle said.

Bangerter faces a tough re-election fight. He's being challenged for the GOP nomination by industrialist Jon Huntsman, who says he'll cut taxes if elected. If he survives Huntsman, Bangerter must face Democrat Ted Wilson, who says he won't raise taxes; and independent Merrill Cook, who promises to drastically cut taxes.

In his re-election announcement speech, Bangerter said he would reduce taxes, if possible. Now Bangerter's budget staff and the Utah Tax Commission are looking for ways to make that possible.

The governor wants to make the income tax more equitable and fair. But he also wants a tax cut in an election year, Searle said. "It's fair to say both those items come to play," he said.

In order to have any real political impact, an income tax cut must come this summer. The State Republican Convention, where Bangerter will first be tested by Huntsman, is June 10-11. The primary election, where political experts expect the final Bangerter-Huntsman showdown, is Sept. 13.

In his Thursday TV press conference, Bangerter said he's not sure a special session will be called. Searle said nothing is decided yet, but if the two conditions listed above are met, he anticipates a special session call in late June or early July.

"After May 15 we should have a pretty good idea how last year's tax changes really affected the income tax revenue. We think they will be up. By June 15 we should have excellent information on specific impacts on taxpayer classes, so we can decide fairly where reductions should come," Searle said.

The task force, to be chaired by Lt. Gov. Val Oveson, who is a certified public accountant, won't just look for extra income-tax revenues to generate the money needed to pay for the tax cuts. Other taxes will be examined, also. If those other sources provide the needed money, income taxes could still be reduced.

"Most of our coal royalty funds are tied up in court action. The governor is trying to settle those disputes. If he can, we'd get a one-time windfall of revenue in the tens-of-millions-of-dollars and ongoing revenues of $5 million to $7 million a year. Some of that could go to income tax cuts."

The state loses millions in sales tax each year through catalog sales because purchasers living in Utah don't pay sales tax. That will be looked at, Searle said.

"And perhaps there are some sales-tax exemptions, good for their day, that could now be ended," he said.